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Tuesday, 07 November 17
DRY BULK SHIPPING: TAKE GOOD CARE OF THE RECOVERY SAYS PETER SAND
 Demand:
Even without much support from Brazilian iron ore exports during August, capesize rates went from $10,000 to $17,000 per day. In September, those gains were retained until Chinese Golden Week in early October reduced trip chartering interest, dampened demand and lowered the freight rates. Not dramatically, but noticeably, says Peter Sand, Chief Shipping Analyst at BIMCO.
Capesize ships have (as of 26 October) been in profitable territory (above $15,300 per day) since 11 August and panamaxes likewise, since 5 September (above $10,200 per day).
Handymax/supramax/ultramax owners and operators who fixed their ships after 21 August, have also seen freight rates covering, not just operational expenditures (OPEX) but also capital expenditures (CAPEX), leaving a slim return on investment. This has only happened three times- for more than two days in a row – in the past two years. Finally, the handy size segment has, for the first time since April 2014, reached a freight rate level above $9,000 per day.
According to Peter Sand, this ongoing recovery is still in a “fragile” state – demand has increased but so has supply. This means only a slight fundamental market improvement. The return to permanent profitable freight rates is still way off. The transport demand for dry bulk cargoes in Q1-2018 is considerably lower than the volumes transported in Q4-2017, and that’s the first hurdle to cross. Maintaining slow steaming is another prerequisite to hold onto the gains that have been achieved.
At the centre of dry bulk demand, as always, is China; growing its seaborne imports of coal during the first nine months of 2017 by 18.7%, and its seaborne imports of iron ore during the first eight months, by 6.9% year-on-year. In total, this is a demand growth of 79m tonnes (27 + 52 respectively) for the two commodities year-to-date. Setting a new world record in steel production for the month of August of 74.6m tonnes, resulted in total growth of 5.6% for eight months’ production in 2017, compared with the same period last year.
Another record was reached in September, when Chinese iron ore imports exceeded 100m tonnes for the first time.
While this is much needed by the dry bulk shipping industry to get out of the doldrums of recent years, there may be a limit as to how far this can go. Imagine if steel production stalls, then iron ore imports are likely only to grow at the expense of domestically mined ore.
BIMCO calculates that substitution of low-quality, domestically mined iron ore in China, for imported high-quality iron ore from Brazil or Australia, would have increased imports by 17m tonnes per month in the first eight months of 2017.
Regardless of recent reports, about one in three Chinese iron ore mines being at risk of losing their mining licenses due to environmental issues, the output from Chinese iron ore mines is still up by 5% in the first eight months, year-on-year. One of the key risk elements in the equation is actual steel consumption in China.
In addition to the strong growth that we have seen into China, US coal exports have certainly added to the panamax and capesize demand in the Atlantic since Q4 2016.
Peter Sand further noted in his report, from November 2016 to July 2017, we have seen a monthly average of 6.4m tonnes of coal being exported from the US to a vast number of destinations like Japan, Egypt, Turkey, South Korea, China, Guatemala, India, Spain and Morocco. This is up by 61% versus the same nine months of the year before. Key export ports, mostly on the Atlantic side, are Hampton Roads and Baltimore, where panamax and capesize ships are used to export 60% of the total volume. In the US Gulf, Mobile dominates exports with shipments of coal in panamax. On the Pacific side, US coal exports are handled via Vancouver.
The total tonne miles adjusted demand growth rate in 2017, is forecast to be 3.9%, the highest in three years.
Supply:
Commenting on supply side, Peter Sand, Chief Shipping Analyst at BIMCO said, the delivery pace has reduced significantly since H1-2017, but so has demolition activity. During H1-2017, 28m DWT was delivered, while 8.5m DWT was demolished. Whereas Q3-2017 has seen only 6m DWT delivered, and 3.6m DWT permanently leaving the active fleet.
Demolition of handymax tonnage, has been dominant this year – a natural reaction from owners operating in that segment, which has seen fleet growth around 5% pa for some time now, clearly outpacing all the other dry bulk segments.
Contracting activity for the year so far, has as expected, gone up from the extraordinarily low levels that we experienced in 2016. While Q1 2017 was still quiet in terms of actual orders, newbuild interest was growing in the background. The larger segments are popular. Panamax and very large ore carriers (VLOC) account for 15 out of the 17m DWT ordered in total, year- to- date (until 2 October). It’s worth noting that many of the VLOCs have been ordered against a long-term charter, most likely replacing existing long-term chartered VLOCs when they are retired. Later in October, another 5 VLOCs were ordered.
For the first nine months of the year, the dry bulk fleet has grown by 2.7%, already a three-year high. BIMCO expects the fleet will end up growing by 3.1% to 16m DWT as demolition expectations are lower than the previously anticipated 19m DWT.
In the future, expected fleet growth remains quite low based on the ships on order now – and does not include orders not yet placed. 2018 could see the fleet grow by less than 1%.
Outlook:
Should we look no further than China when it comes to dry bulk market demand?
No, is the short answer – at least not in relation to steel production ingredients – iron ore and coking coal. In 2008, global iron ore imports were at 841m tonnes, out of which China took 436m tonnes (52%). In 2017, the global seaborne market is at 1,478m tonnes, out of which China takes 1,075m tonnes (73%).
For thermal coal, a few other nations are worth taking note of, in addition to China. Those are India, South Korea and Malaysia. Additionally, the US seems to have re-established itself as an option in the seaborne coking coal market, providing long distance voyages into Asia. Ever since the outbreak of the global financial crisis in 2008, the dry bulk market has only had one growth area: Asia. All other regions of the world contribute with steady or declining imports.
Note that European imports of:
- Iron ore are down from 140m tonnes in 2008 to 117m tonnes in 2017
- Coking coal are down from 59m tonnes in 2008 to 46m tonnes in 2017
- Thermal coal are down from 156m tonnes in 2008 to 128m tonnes in 2017.
For the current time and Q4 2017, selected seaborne trades from major exporters including iron ore, coal, grains, soya and steel products are expected to grow by 3.4% from Q3 2017 (source: SSY). Whereas, grain peaks in Q1 and Q3, and soya in Q2, the seaborne trading of steel products, coking coal, thermal coal and iron ore will all peak in Q4.
After a bit of a downturn in the market during the first half of October (which was expected), demand lifted freight rates again. It’s time to make the most of it, before seasonal low demand in Q1-2018 get the upper hand and push freight rates down Peter Sand, Chief Shipping Analyst at BIMCO concluded.
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Monday, 06 November 17
THE THERMAL COAL MARKET CAME UNDER SOME PRESSURE AS THE OUTLOOK FOR DEMAND WEAKENED - DANIEL HYNES
Commodities were mixed as investors grappled with a revised tax plan in the US amid a rising USD said Daniel Hynes in his linked in post.
Acco ...
Monday, 06 November 17
THE FREIGHT MARKET WAS CONTINUED TO SOFTEN THIS PAST WEEK; BCI DOWN 184 POINT WEEK OVER WEEK
COALspot.com: The freight market was continued to soften this past week compared to the previous week, as BDI and all segments except Panamax index ...
Friday, 03 November 17
U.S. COAL PRODUCTION FELL WEEK-OVER-WEEK, EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 14.5 million short ton ...
Wednesday, 01 November 17
SHIPPING MARKET INSIGHT - KONSTANTINOS KONTOMICHIS
As it was expected, the strong dry bulk freight market of the past couple of months has inspired similar activity in the second-hand market. Noneth ...
Tuesday, 31 October 17
BALTIC DRY INDEX TAKES A BREAK FROM ITS UPWARD RALLY COURSE - GEORGE LAZARIDIS
It has been a week of corrections for the dry bulk freight market as it seems as the general Baltic Dry Index takes a break from its upward rally c ...
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Showing 1896 to 1900 news of total 6871 |
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- Jaiprakash Power Ventures ltd
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
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- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
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- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
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- International Coal Ventures Pvt Ltd - India
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- McConnell Dowell - Australia
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- Interocean Group of Companies - India
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- Gujarat Sidhee Cement - India
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- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
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- Sical Logistics Limited - India
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Economic Council, Georgia
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
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- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- The University of Queensland
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- White Energy Company Limited
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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